Shares of chipmakers Intel Corp., Advanced Micro Devices Inc. and Nvidia Corp. dropped Tuesday as analysts said demand for computers looks shaky heading into the all-important back-to-school season.
The stocks tumbled as J.P. Morgan analyst Christopher Danely warned investors that personal computer orders are “falling off a cliff.” Barclays Capital’s Tim Luke told clients that his latest checks reveal that third-quarter PC sales “have continued to remain subdued and Intel and AMD seasonal sales guidance may prove bold.”
The comments amplified fears that PC sales, which have been buoyed by intense interest in cheap laptops, are starting to slow. One reason is tightfistedness by consumers who are worried that the economy and their job prospects will stay weak.
Some semiconductor makers have reported blowout numbers — Intel, for example, booked its biggest quarterly net income in a decade in the second quarter — but in many cases their stocks have barely budged. That’s because investors have been worried that forecasts for the second half of 2010 could be too optimistic, given worries about Europe’s debt crisis and the strength of the U.S. economy’s recovery.
Intel is the world’s No. 1 maker of the “brains” of PCs. AMD is No. 2. Nvidia is a big maker of graphics chips. The stocks can rise or fall together on sweeping news about the health of the computer market.
On Tuesday, Intel shares fell 4.2 percent, or 86 cents, to $19.79. AMD shares fell 8 percent to $6.83, while Nvidia shares slipped 4.5 percent, or 43 cents, to $9.21. The Philadelphia Semiconductor Index slid 2.8 percent, or 9.88 points, to 344.17 points — a bigger drop than in the broader markets Tuesday.
Computer sales are being hurt by austerity measures in Europe, tightened spending in China and a cooling off of stimulus spending in the U.S., said analyst Tristan Gerra…